Modern retailing takes root

By Chartered Marketeer Prasanna Perera

Prasanna
Perera

The retail industry is the largest industry globally and many are not
aware of this fact. In Sri Lanka, we are observing a boom in the retail
industry with the rapid expansion of supermarket chains, clothing
chains, electronic stores, footwear stores and IT stores. In this brief
article, my endeavour is to examine the factors that are triggering this
resurgence of the retail industry.

Sri Lankan economy

The growth of the Sri Lankan economy in the post conflict phase, has
been a major driver for the retail industry. With the boom in the
tourism industry, the entire economy has received a tonic, with
investment benefits spreading across communities.

The rapid infrastructure developments across the country has resulted
in new townships and opportunities for setting up retailing business.

Consumer lifestyles

Sri Lankans are travelling overseas more regularly and are also
exposed to global trends through television and satellite and cable
networks. This has made Sri Lankan consumers westernized in their
thinking to shop at modern retail establishments. Consumers are
preferring one-stop-shopping destinations, which offer convenience,
choice and comfort. (3 C's). The result is a boom in modern retailing,
with rapid expansions across different retail formats and locations.

Expansion of retail establishments

We are beginning to see the advent of Hypermarkets (Mega
Supermarkets), through the expansion of Arpico Supercentre's . The
latest in Wattala is truly a hypermarket with over 60,000 sq.ft. of
retailing space. Cargills Big City and K-Zone (managed by Keells) are
also good examples of hypermarkets.

Even in Consumer Durables, Singer, Abans, Softlogic and Browns have
expanded their showroom network. Singer has developed a multi channel
retail network, namely Singer Plus, Singer Mega, Singer Homes and Sisil
World. Abans has the Elite showrooms and Abans showrooms. Softlogic has
the Softlogic Max showrooms.

Based on the evidence I have provided, you would no doubt agree that
there is a definite retail boom in the country.

What Impact will modern retailers have on the traditional retailers
(Kade's) ?

Traditional retailers will need to upgrade their entire offering, or
else they will simply disappear! There is definite evidence of
traditional retailers upgrading with many 'Super' outlets emerging. For
example Kamal Stores has become Kamal Super and Nihal Stores has become
Nihal Super etc.,

These traditional retailers have been forced to upgrade, with the
supermarkets being set up, in close proximity.

Traditional retailers who refuse to upgrade are gradually
disappearing from the market.

My view is that modern retailers have helped upgrade retailing
standards across the country.

A
busy supermarket aisle

The Future Modern retailing has come to stay in Sri Lanka, thereby
offering a better quality of life to Sri Lankans. My belief is that the
future will see global retailing chains entering Sri Lanka, such as
Tesco, Walmart, Courts, Big Bazaar, Shopper's Stop, Mohamed Mustafa to
name a few.

Together with the Shangri-La's, Movenpick, Four Seasons and other
star class hotel chains, these retail chains will change the landscape
of Sri Lanka forever.

Marketeers of all categories of products and services will do well to
ride the retail bandwagon , or else run the risk of being left behind.

There are new skills that Marketeers of today need to harness to
capitalize on the retail boom.

These skills include merchandising and displays, category management,
sensory marketing and branding, loyalty marketing, eTailing to name a
few.

With the rapid growth of the modern retailing industry, the balance
of power will shift to the consumer. With traditional retailers (Kade's)
the mudalali and shop keeper had the power.

This is a significant strategy perspective for marketeers, in terms
of the marketing mix and budgets.

"The world is driven by the retail industry, the largest Industry
globally." (Author)